The company made an underlying pre-tax profit of £706m, down from last year £714m. This was slightly better than analysts expected, with the company saying it had cut costs ruthlessly, reducing the amount of food it had to throw out because it was damaged or out of date, for instance.
However, this is the first time that profits have fallen for three years. Marks & Spencer was once Britain’s most profitable listed retailer, and the first to ever make more than £1bn in a year but it now makes less money than Tesco and J Sainsbury.
Total sales increased from £9.74bn to £9.93bn. Bolland said the company’s target to increase sales substantially, by up to an extra £2.5bn, was being more or less scrapped because of the gloomy state of the British high street.
The store has recently introduced new packaging for its Simply M&S range – a value range of over 500 products.
‘Challenging economic environment’
Chief executive Marc Bolland said: “Marks & Spencer performed well in a challenging economic environment, growing group sales by 2% and holding market share. We also made good progress with our strategic plans.
“Whilst the economic environment has deteriorated since we first set out our strategic plans, we have made significant progress.
“Our UK pilot stores are delivering good results, which has given us the confidence to launch phase two of the programme. We are well on track to become a truly international multi-channel retailer. By the end of this year we will be transacting from ten websites worldwide and opening around 100 international stores per year.”
Elsewhere the firm confirmed its commitment to its Plan A. It said that “Plan A remains at the heart of how we do business and continues to help our customers live more sustainable lifestyles”.
It also said that the challenge “of becoming a more sustainable business remains significant, but a great deal has been achieved including putting us on track to become a carbon neutral, zero waste to landfill business”. M&S will report on its latest Plan A progress in June.